Gas utility regs going Baltic

The Public Utilities Regulatory Commission (SPRK) has received a total of 11 proposals during the public consultation on the draft regulations for the access and use of the natural gas transmission system and the use of the underground gas storage facility at Inčukalns outside the Latvian capital Riga, several of them coming from agencies in the neighboring states.

Rolands Irklis, a member of the SPRK council, told newswire BNS Thursday that, as the natural gas transmission system and the underground storage facility owned by the Latvian natural gas utility Latvijas Gaze will become available to all users and potential users of the gas transmission system, proposals for the draft regulations had also been received from the market players in Lithuania and Estonia.    

He said that the regulator would make more detailed comments in a few weeks after reviewing the proposals.

According to the SPRK website, proposals for the draft regulations have been submitted by the Estonian Competition Authority and the Estonian companies EG Võrguteenus and Eesti Energia, the Lithuanian Ministry of Energy and the Lithuanian National Commission for Energy Control and Prices as well as the Lithuanian companies Klaipėdos Nafta, Lietuvos Duju Tiekimas and LITGAS, but the Latvian entities that contributed their opinions to the public consultation are the Economics Ministry, a business association called the National Gas Terminal Society and the state-owned electricity utility Latvenergo.  

The deadline for submitting proposals to the draft regulations prepared by Latvijas Gaze for access to and use of the natural gas transmission system and the Inčukalns underground gas storage facility in Latvia was March 4.

Latvijas Gaze drafted the regulations after the adoption of amendments to the Energy Law in Latvia in 2014. In accordance with the Energy Law, the regulator approves the regulations for the use of the natural gas transmission, distribution and storage as well as liquefied natural gas system and natural gas storage drafted by the respective operator. The regulations have to be well-grounded, economically justified, fair, transparent and available to all users of the gas system and applicants seeking access to the system.

The draft rules of the usage of natural gas transmission system and Incukalns underground gas storage facility were first submitted by the Latvijas Gaze in September 2014, and the regulator repeatedly asked to amend the draft. The final version of the rules will be adopted after receiving and considering the opinions of market players.

Currently access to the natural gas transmission system and underground gas storage facility is granted to third parties based on individual agreements. Latvijas Gaze has so far concluded nine such agreements on the use of the transmission system and/or the storage facility.

Latvijas Gaze is engaged in the purchasing, transportation, storage and distribution of natural gas. The company is quoted on the Secondary List of the Nasdaq Riga stock exchange. The company's key shareholders are Germany's E.ON Ruhrgas International, Russia's Gazprom and Itera Latvija.

The Latvian government on March 3 decided in principle to start the unbundling of Latvijas Gaze natural gas utility, separating gas distribution and sale from transmission and storage, in 2016. The government intends to liberalize the Latvian gas market in line with the EU requirements by establishing Latvijas Gaze's sister company in charge of gas transmission and storage operations next year and separating the companies' ownership on April 3, 2017, upon expiry of Latvijas Gaze monopoly as provided for in the 1997 agreement on privatization of the natural gas company.

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